Correlation Between Capri Holdings and 30 Year
Can any of the company-specific risk be diversified away by investing in both Capri Holdings and 30 Year at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Capri Holdings and 30 Year into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capri Holdings and 30 Year Treasury, you can compare the effects of market volatilities on Capri Holdings and 30 Year and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Capri Holdings with a short position of 30 Year. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capri Holdings and 30 Year.
Diversification Opportunities for Capri Holdings and 30 Year
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Capri and ZBUSD is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and 30 Year Treasury in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 30 Year Treasury and Capri Holdings is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Capri Holdings are associated (or correlated) with 30 Year. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 30 Year Treasury has no effect on the direction of Capri Holdings i.e., Capri Holdings and 30 Year go up and down completely randomly.
Pair Corralation between Capri Holdings and 30 Year
Given the investment horizon of 90 days Capri Holdings is expected to under-perform the 30 Year. In addition to that, Capri Holdings is 6.17 times more volatile than 30 Year Treasury. It trades about -0.06 of its total potential returns per unit of risk. 30 Year Treasury is currently generating about -0.01 per unit of volatility. If you would invest 12,084 in 30 Year Treasury on September 1, 2024 and sell it today you would lose (156.00) from holding 30 Year Treasury or give up 1.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 96.91% |
| Values | Daily Returns |
Capri Holdings vs. 30 Year Treasury
Performance |
| Timeline |
| Capri Holdings |
| 30 Year Treasury |
Capri Holdings and 30 Year Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capri Holdings and 30 Year
The main advantage of trading using opposite Capri Holdings and 30 Year positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capri Holdings position performs unexpectedly, 30 Year can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in 30 Year will offset losses from the drop in 30 Year's long position.| Capri Holdings vs. Movado Group | Capri Holdings vs. Signet Jewelers | Capri Holdings vs. Lanvin Group Holdings | Capri Holdings vs. TheRealReal |
| 30 Year vs. Aluminum Futures | 30 Year vs. Cocoa | 30 Year vs. Silver Futures | 30 Year vs. 10 Year T Note Futures |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Transaction History module to view history of all your transactions and understand their impact on performance.
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